Taxes and bookkeeping tips for the creative entrepreneur from Amy Northard, CPA on http://www.beckymollenkamp.com

This is the first in a series of expert interviews. Stay tuned for more!

As April 15 rapidly approaches, taxes are probably front and center on your mind. If you’re like many self-employed folks, just hearing the word taxes gives you a pit in your stomach. How much will I owe? Did I file everything correctly? Will the IRS come beating on my door soon? It’s enough to make anyone a nervous wreck.

Trying to settle all those upset tummies is Amy Northard, a CPA for creatives. She helps entrepreneurs across the U.S. navigate taxes and set up bookkeeping systems so they can focus on the part of their businesses they love—the creative stuff.

Today, Amy shares why she chose to make taxes her life (is she crazy?!) and offers up some helpful tips for making tax time less painful.

Q: Why did you become a CPA?

A: Taking it all the way back to high school. My dad insisted that I take accounting class as my elective, which I rolled my eyes at SO HARD! Turns out, I ended up enjoying it, but still had that pang of jealousy when friends were telling me about how they spent their class time in jewelry class.

As I entered college, majoring in accounting seemed like the natural path because I really had no other ideas at the time. During college, I interned at a CPA firm during tax season and was pleasantly surprised because I really loved organizing the client information and filling out all the forms. After college, I went to work for that same CPA firm and began studying for my CPA license. It took quite a bit of studying, but when I finally passed the four-part exam, I was thrilled.

Q: Why do you work with creatives?

I had a little bit of a quarter-life crisis and couldn’t see myself working in a boring cubicle away from my loved ones and friends for so many hours out of the week. I took the leap to quit that great job and started working a part-time job that offered health insurance so I could build my business. I chose to specialize in creative small businesses because I’ve always had a creative side and have always loved entrepreneurship. Seeing people make money off of what they love to do each day inspires me in a way that my old job never did.

Q: When there are cheap tools like Turbotax available, why should a business owner invest in a CPA?

A: Even with all the questions that Turbotax asks to help you file your taxes, it’s still super easy to royally mess things up and find a letter from the IRS in your mailbox. By working with an accountant, you have someone who knows the tax laws and can interpret them for you and your business.

You’ll have personalized attention and a live human to turn to with any questions as you gather your information. And if that wasn’t enough, a CPA can provide recommendations on additional deductions you may be missing out on that you didn’t even know about!

Q: What are the biggest complaints or fears about bookkeeping and taxes that you hear from new clients?

A: I think quite a few people fear that their bookkeeping is a mess and they’re afraid to hand it over at tax time. The good news is that I don’t just import the numbers into the tax return, I make sure everything makes sense and ask questions if it doesn’t.

I think another fear is that they will owe a bunch when they file their taxes. To avoid this being a reality, I recommend saving about 30% of your profits (income after expenses) and setting aside this amount in a separate savings account so you can pay it in quarterly or annually.

Q: What are the most common mistakes small-business owners make when it comes to their taxes?

A: I see a lot of business owners who are scared to take deductions like a home office because it could be a red flag for an audit. The thing to remember is that there are so many more self-employed people now than even 20 years ago, so it’s much more common to have a home office and the IRS has bigger and better things to keep an eye on. As long as you report all your income and don’t over-report your expenses, you have nothing to fear!

I also see a lot of creatives putting off their taxes until April 15th because they just don’t want to face the results. The sooner you tackle your taxes, the more time you’ll have to gather funds if you do end up owing a pretty penny when you file.

Q: How should someone go about choosing a CPA? What questions should they ask for or qualifications are important?

I recommend starting by asking other business owners in your niche who they’re using and are raving about. That will give you a really good starting point. Then, even if it feels scary, contact the CPAs and actually talk to them face-to-face or over the phone. Ask them if they have experience in your industry and learn about their tax preparation process.

Q: How important is it that you gel with your CPA?

A: I think this is huge and it’s the reason I always start out with a free 15-minute phone consultation. Both of us can get an idea of whether we click and will enjoy working with each other. If you don’t get a good vibe from the CPA, you’ll know instantly and it’s best to continue the search.

Q: Are there any other tips you can share to help small business owners feel less anxiety about tax season?

A: Don’t try to learn a new tax software if you need to catch up on last year’s bookkeeping. Break out a spreadsheet and start organizing your income and expenses there. Work month by month instead of thinking about it in terms of the whole year. Then, add up the monthly totals for your annual total.

Find an accountability partner that will help you keep up with your bookkeeping each month instead of letting it all slide until the end of the year. You can schedule monthly check-ins with each other so you have someone other than yourself to stay accountable to. This could be your spouse, your accountant, or another business buddy. By keeping up with your bookkeeping, you’ll know how much to set aside for taxes and then when tax time rolls around, you’ll be ready.


Learn more about Amy Northard—The Account for Creatives at her website, or follow her on FacebookInstagram, or Twitter. There’s plenty of information (and rates) for her CPA, virtual CFO, and bookkeeping services. Amy also offers the Be Your Own CFO course, a simple guide to bookkeeping and taxes for the small business owner.